PRESIDENT BUSH: Thank you all. Please be seated. Thank you all
very much for allowing us to come. John, thanks for your leadership.
He's doing a fabulous job as the Secretary of Treasury, and I'm so glad
he decided to join my administration.

I want to thank you for the warm welcome, and I want to thank you
all for helping us keep a commitment to the American people. We
promised tax reductions for the good of American families and for the
good of our economy. And we delivered on that promise. And soon the
mail carrier will be delivering the checks that we promised to the
American people. (Applause.) Twelve billion dollars in tax relief is
on its way to more than 25 million American families.

And this is an appropriate place to come and talk about checks
being mailed to American families, here at the Financial Management
Service. The reason why is because here and at other facilities, these
checks are being printed and the checks will be mailed. And I want to
thank you all very much for working as hard as you are to make sure
that the promise that the government has made is being kept.

I know a lot of you are putting in weekend shifts. I know a lot of
you are working really hard. And I am grateful, but more importantly,
the American people should be grateful for the work you do right here.
Thank on behalf of -- (applause.)

I have traveled today with two really fine men and great United
States senators, Arlen Specter and Rick Santorum. I want to thank you
all for coming. I want to thank you for -- (applause.) I want to
thank Mike Colarusso and Bob Mange for leading this fine group of
folks. Thank you all for your hospitality. (Applause.)

I want to thank those good workers who allowed me and the press
corps to come and see you doing your job. It's not easy to do your job
with a distraction -- (laughter) -- and I must confess that sometimes
the presidential entourage can be distracting. (Laughter.) But we
want to thank you all for your hospitality, and most of all, thank you
for being such great Americans and working so hard on behalf of the
American people.

Today when I landed in Philadelphia, I met a lady named Valerie
Christy. She's what we call USA -- there's Valerie, right there. I'm
sure you don't know who Valerie is, but you're about to. Because
Valerie is a person who has taken time out of her life to make somebody
else's life better. She is a volunteer. One of the thing she's done
is she has participated in the Philadelphia Cares Day, which helps to
paint and repair public schools in Philadelphia. She also volunteers
twice a month in what they call Partners in Technology, to help seniors
and other special needs residents learn to use the technological change
-- learn to adapt to the technological changes of our society.

In other words, and the reason I bring this up is, much has been
made about the great strength and might of America -- and we are strong
and we are mighty and we'll remain that way -- but the true strength of
our country is the heart and soul of our citizens. And Valerie
represents that. She represents those who have heard the call to love
a neighbor like you'd like to be loved yourself.

And the reason I bring this up is I want to continue to remind our
fellow citizens that the way to change America for the better, and the
way to make sure the great promise of our country exists for every
single citizen, is that when we see somebody in need, we must act. If
you're worried about children not being able to read, mentor a child.
If you have a shut-in in your neighborhood who is lonely, provide
comfort and love to that person.

See, each of us can make a difference in America. America changes
one heart, one soul, one conscience at a time. And each of us must be
that some person trying to help make that change when we find somebody
who hurts. Valerie, thank you for the example you set for our fellow
citizens. (Applause.)

You know, this country has faced a lot of challenges in the past
few years. And I believe those challenges have brought out the best in
America. On September the 11th, 2001, a date I will not forget so long
as I'm on this Earth, America's enemies declared war on this country.
That's what happened on that day. It was a declaration of war by
people who hate what America stands for. And war is what they got.

We are dismantling the al Qaeda network, leader by leader. We are
finding these killers, one by one, and they will be brought to
justice. (Applause.) We also acted in decisive ways to uphold
doctrine. One of the doctrine said, if you harbor a terrorist, you're
just as guilty as the terrorist. And so in Afghanistan, we recognized
that there was a cruel and oppressive regime that had turned a nation
into training camps. And so we removed that regime. And the people of
Afghanistan are free.

In Iraq, a dictator was arming to threaten the peace. And he
defied the demands of the world. He didn't defy just the demands of
the United States, he defied the demands of the United Nations Security
Council -- not once, but many times. And so, for peace and for the
security of the free world, we removed that regime. And the Iraqi
people are now free.

Our military is still facing danger from elements of the fallen
regime and other extremists. These folks hate the thought of Iraq
being free. And we're finding those people and we're bringing them to
justice. Two days ago, in the city of Mosul, the careers of two of the
regime's chief henchmen came to an end. Saddam Hussein's sons were
responsible for torture, for maiming innocent citizens, and for the
murder of countless Iraqis. And now, more than ever, the Iraqis can
know that the former regime is gone and is not coming back.
(Applause.)

Our people in uniform, our brave soldiers, are doing essential work
in the war on terror. What they're doing in Iraq is an integral part
on winning the war on terror. You see, a free and democratic and
peaceful Iraq will not threaten America or our friends with illegal
weapons. A free Iraq will not provide weapons to terrorists, or money
to terrorists, who threaten the American people. A free Iraq will not
destabilize the Middle East. A free Iraq can set a hopeful example for
the entire region. And so the pursuits of freedom -- and as the
pursuits of freedom replace hatred and terror in the Middle East,
America and our friends will be more secure.

Our nation is incredibly grateful for the men and women who defend
us, for the men and women who serve the cause of peace and security,
and we are incredibly proud of those who wear our nation's uniform.
(Applause.)

We have risen to challenges abroad, and we are rising to challenges
at home, as well. When I took office, when my administration came into
office, the stock market had been falling for months and the economy
was sliding into recession. And so, we acted. And we passed tax
relief, which made the recession one of the most shallow in history.
We found that we had some of our corporate executives -- we found they
weren't telling the truth. (Laughter.) They were being dishonest,
not only to their shareholders, but their employees. And we acted.
We'll punish those who violate the law, and we're working together with
Congress -- and we worked together with Congress, and I signed the most
historic corporate's governors reforms in a long period of time.

Last year, we saw that our economy was still not growing fast
enough, or creating jobs we need. So we acted. We passed meaningful,
real tax relief. We expanded the child credit from $600 to $1,000 per
child. We made that change retroactive to January 1st of this year,
which is why the checks are going out of this facility soon. In other
words, we said, if we've got a problem, let's get the money to the
people as quickly as possible. In the Jobs and Growth Act, that was
the tax relief act, all aimed at increasing the capacity for our fellow
citizens to find work. We brought down the marriage penalty. You see,
we believe we ought to encourage marriage, not discourage marriage in
the tax code. (Applause.)

We reduced all tax rates so our fellow citizens have got more
take-home pay. That's good for the economy when people have more
take-home pay. You see, by cutting individual tax relief, we passed
tax relief, as well, for millions of small businesses, because most
small businesses are what they call a sole proprietorship or subchapter
S, which means they pay taxes at the individual income tax rates. So
in other words, the tax relief not only helped our families and our
citizens, but it also helped the small business sector of our economy.

And the benefits for this tax relief will be spread throughout all
the economy. That's what's important for people to know -- it's
widespread benefits. You see, because when people have more of their
own money, more money in their pocket, they will demand a good or a
service. And when somebody demands a good or a service in our system,
somebody will produce the good or a service. And when somebody
produces that good or a service, it means it's much more likely, as
demand increases, that somebody will be able to find a job.

And that's what we're interested in. We're interested in creating
jobs, so our fellow citizens can find work. More than a million
Pennsylvania families will benefit from the increased child tax
credit. And earlier I had a chance to talk with some of the families
who have joined us today. See, I think it's very important for our
fellow citizens to understand, we're not just talking theory. When
people get checks, it changes -- it helps them with their lives.

The Lonabergers are with us. Barry says he wants to start saving
more for his retirement and for the college education of his two sons,
Kyle and Brandon, who are with us today. Where's Kyle? There they
are, back there. He will get $800 soon, because of the increased child
credit. His tax burden will drop by -- be cut by 29 percent because of
the tax relief.

He -- so what does Barry say? He said, look, I'm interested in
saving for my kids. He also said, this extra money will help on a
summer vacation and he wants to renovate the kitchen in his home. So
-- and he told me he's going on a vacation. See, that makes it more
likely that somebody is going to find a job at the motel in the place
where he's going. (Laughter.) And I'm sure he's going to eat when he
gets there. So he'll take some of the money and he'll buy food. And
that's good for the person who owns the restaurant and for the people
that serve the food or cook the food.

And when he renovates his kitchen, he's going to have to buy some
equipment to help renovate it, which means somebody is going to have to
manufacture the equipment that he buys, to help renovate his -- or the
paint, for that matter. In other words, it has an effect throughout
our economy. Increasing the child credit helps Barry. But it also is
going to help those who deliver the goods and services that he now
demands as a result of having extra money in his pocket.

Brian Peffley is here today. Brian and his wife Heather have three
sons, Caleb, Joshua and Noah. And they have got to make sacrifices.
Every family makes sacrifices. And one of the things he wants to do is
to obviously have more money for back-to-school expenses. People are
beginning to think about what it means to send their child back to
school.

One of the sacrifices he was going to make in order to make sure he
could -- he and his family could purchase back-to-school expenses was
he was going to delay taking a course he needed to get his bachelor's
degree. And so what this means is, when he gets his check for $1,200,
it will mean that he now can do both. And that's important. First of
all, purchasing school supplies means the school supply manufacturer or
school supply salesman has got a little extra business. But also, one
of the things that's important in our work force is for people to
continually upgrade their education, so that they can be more
productive and find a better job that pays better pay. One of the
things we want to encourage is additional education. And I appreciate
the fact that Brian wants to go back to school.

Here's what he said. He said, this tax relief has eased the burden
on us, and it will continue to allow us to achieve our goals and
dreams. And that's what we want. We want people to have dreams in
America and make it easier for them to realize their dreams.

Jeanette Luna is with us today. She, by the way, has the hardest
job in America. She is a single mom. (Applause.) Adley is with us
today. Eric is not here. But she earns a modest salary. And thanks
to the tax relief, her refund will go from $600 to more than $1,100.
And that will help pay for the school supplies. She's made the
decision to send her child to a Catholic school, and that will help
with tuition payments, which is important. It will help her buy
clothes.

One of the things that's important is that tax relief helps people
from all walks of life. And one of the things I've asked Congress to
do, by the way, is to help low-income families like Jeanette's by
making more of the child credit refundable. The benefits of the Jobs
and Growth Act should be as broad as possible, should be widespread
throughout our society. The House and the Senate have passed different
versions of extending the child credit. They've got to resolve their
differences and get it to my desk as quickly as possible, so people can
get additional help.

Now, as John mentioned, the benefits of tax relief are positive.
Economists, a lot of economists expect growth to pick up over the next
18 months. In other words, we've overcome a lot and we've laid the
foundation for growth. And I'll tell you why they believe that. First
of all, home sales are rising, and that's positive. We want, by the
way, more people owning their own home. That's one of -- a grand
objective for our economy. We've got a down payment plan to help
people do that. We're trying to simplify the contracts so people don't
get discouraged by the fine print.

But the best thing that's happening is, is that low mortgage rates
have encouraged people to buy a home. And when you couple that with
rising after-tax incomes, that's a positive foundation for home
growth.

The other thing is people have refinanced their homes. In other
words, lower mortgages mean that you can refinance and put a little
extra money in your pocket for savings or needed purchases. Inflation
is low, and that's positive. That's part of the foundation for
economic vitality. Retail sales are rising, and that's good.
Productivity amongst our workers is the highest it's been in a long
while, and that's positive -- we're a more productive society.

Investors are showing more confidence. The stock market seems to
be trending upwards. That's a positive sign. Since we're an ownership
society, more and more people have got different retirement plans, and
they count on the markets as part of their assets for retirement.

We've reduced taxes on stock dividends, and now companies have
announced plans to increase their dividend payout. And some companies
are going to pay dividends for the first time. And that's positive for
our economy because billions of dollars in cash will now go directly to
shareholders and back into the economy.

And so, we're making progress. The other thing we've done is, as I
mentioned, small businesses get relief from tax relief, which is
vital. And what's really important for -- to invigorate small business
growth is most new jobs are created by small businesses in America.
And therefore, it makes sense to have a policy that enhances the
entrepreneurial spirit of America.

And so we did not only reduce taxes, but we also allowed for
certain expensing of new equipment to encourage people to purchase new
equipment. In other words, if there's an incentive for some small
business to purchase a new piece of equipment, and they do, somebody's
got to make the equipment. And when somebody makes the equipment, it
is all part of making sure that there's job stability and job growth
throughout our economy.

And so we've -- there are hopeful signs, good progress. But there
is more to do. And one of the things we've got to do is to make sure
that -- you know, we've got lawsuit reform. Listen, businesses are
fighting a lot of frivolous litigation. And it's costly to our
economy. And the House has taken up the reform of class-action -- the
class-action system. And the Senate has not. In my judgment, in order
to enhance economic vitality, the Senate must act on fair and balanced
tort reform legislation, starting with class-action lawsuits.

We need a comprehensive energy bill. We've got to have a policy, a
comprehensive energy policy if we want our economy to grow. I'm
concerned about the costs of natural gas. The demand is strong for
natural gas, and supplies are not as plentiful for natural gas, which
means there's price pressure. The House has acted on this important
piece of legislation; the Senate hasn't. We need an energy bill that
promotes conservation, that applies new and cleaner technologies, but
one that improves national security by making us less dependent on
foreign sources of energy.

We need to expand trade so our farmers and ranchers and
manufacturers have got new markets. Listen, if you're good at
something, you want to be able to sell what you're good at all around
the world. And we're really good at a lot of things, and we ought to
be encouraging markets to open up for United States products. That's
important for job creation.

The other thing is that as we create new job opportunities, we've
got to help the people be prepared to fill those job vacancies. And so
I proposed what we call reemployment accounts. It gives Americans a
chance, particularly those who are having the greatest difficulty
finding work, to realize their dream of work. People get $3,000 to use
in their job search. Now, that $3,000 should be used according to the
needs of the people, not according to what the government thinks their
needs are. So if a person needs child care, they ought to be able to
use that money. If a person needs transportation, they ought to be
able to use that money. If a person needs extra training, they ought
to be able to use that money. If a person finds a job in another part
of the state, they ought to be able to use that money to help them
move.

In other words, this is focus money, called reemployment accounts,
to help people get ahead. When we expand this economy, we've got to
recognize that some people need training and help to enter in that work
force.

And the other thing I said, if a worker believes -- a worker can
find work within 13 weeks, and there's still money left over of the
$3,000, they can put it in their pocket as a reemployment bonus.
Congress needs to look at this idea, need to act. They've got to
understand that as we expand the economy, some of our citizens need
some focus and some help.

And one of the things you hear talk about is the deficit. And
we've got a deficit. We've got a deficit because revenues to the
Treasury have dropped as a result of recession. And we've got a
deficit, as well, because I'm spending the money necessary to win the
war. My attitude is when we put our troops in harm's way, they deserve
the best. When we've got people overseas defending us -- (applause.)
I also firmly believe that as the economy -- I know as the economy
grows, there's going to be more revenue coming into the Treasury. And
the tax relief as I've described to you will help the economy grow.

The best, surest way to make sure we deal with the deficit is to
make sure we don't overspend in Washington, is we have a reasonable
increase in discretionary spending. And I proposed Congress stay
within a 4-percent increase of discretionary spending. It's about the
same amount that the average American household budget will increase
this year. It seems to make sense to me. If it's good enough for
American families, it ought to be good enough for the appetite of the
Congress. (Applause.)

The good news is they voted for that number, and now we expect them
to hold the line. And I believe with economic growth and spending
discipline, we can cut the deficit in half over the next five years.
And that's progress.

What I hope you come away with is that I believe in the future of
this nation, and I believe the economy is strengthening, is going to be
strong, because I know the character of the American people. In 22
months -- think about this -- in 22 months our nation has been tested
by a national emergency, by corporate scandals, by a recession, and by
war. And time after time, this country has responded effectively to
each challenge we faced. Time after time, we have shown firm resolve
and unshakable faith in our country. (Applause.)

And the basis of the Jobs and Growth Act, the kind of fundamental
principle of the Jobs and Growth Act is that I've got faith in the
American people, in the strength and the enterprise and the creativity
of the American people. And I believe with hard work and
determination, this economy is going to be strong. We're headed in the
right direction. Better days are ahead for our citizens.